Gold Futures Tumble To 9 Month Low
ICM Brokers | Sep 22, 2014 03:18AM ET
Crude Oil
West Texas Intermediate oil futures declined on Friday, as concerns about weak demand and a broadly stronger US dollar weighed. The U.S. Energy Information Administration said September 17 that U.S. crude oil inventories increased by 3.7 million barrels last week, the first weekly gain in five weeks. Total U.S. crude oil inventories stood at 362.3 million barrels, the highest level for this time of year since 2012. A stronger dollar also kept pressure on oil and other dollar-denominated The U.S. central bank cut its monthly bond-buying program by another $10 billion following its two-day policy meeting on September 17, keeping the program on track to finish next month. Markets interpreted the Fed's statement as hawkish, despite policymakers maintaining language suggesting that rate hikes would not happen for a "considerable time."
GOLD
Gold futures tumbled to a nine-month low on Friday, as a broadly stronger U.S. dollar and growing expectations for higher U.S. interest rates dampened sentiment for the precious metal. The Federal Reserve cut its monthly bond-buying program by another $10 billion following its two-day policy meeting on September 17, keeping the program on track to finish next month. While the Fed reiterated that it expects rates to remain on hold for a "considerable time" after its quantitative easing program ends, it also projected a faster pace of rate hikes. For the end of 2015, the median forecast was 1.375% compared to a June forecast of 1.125%. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
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